A company offering controversial "stem cell" injections to hundreds of people from the UK with multiple sclerosis and other neurological diseases is planning to get around a ban on treatment in Ireland by carrying it out in international waters on an overnight ferry.

Advanced Cell Therapeutics (ACT), which has an address in Geneva and a London telephone number, has been supplying stem cells from umbilical cord blood to 12 clinics around the world, of which two are in the Netherlands and one in Spain. Demand from the UK - where the treatment is illegal - has been huge, following tabloid newspaper stories about apparent remarkable recoveries and an interview with a clinic doctor on television's Richard and Judy programme.

Scientists, however, dismiss ACT's claims, saying that nobody has yet been able to trick stem cells into repairing the spinal nerve damage that causes MS.

The Guardian recently revealed that ACT has taken over the business of a US company called Biomark International, which closed in 2003 during an investigation by the drugs regulatory agency. Biomark's founders now face a 51-count indictment for allegedly obtaining thousands of dollars by making fraudulent claims about the effectiveness of their treatments.

The Irish Medicines Board has now acted to stop the treatments, costing up to £12,000, that have recently begun at the Cork Road Medical Centre in Carrigaline, which had 400 patients from the UK booked for the coming weeks. In a statement the board confirmed "that it is aware of the stem cell therapy being conducted in the Cork region ... [It is] conducting an investigation into this practice."

But the Guardian has learned that ACT plans to continue treating patients from the UK this week by booking them on to the Cork to Swansea ferry which will take them into international waters, outside Irish jurisdiction. "ACT is offering a convenient alternative, which involves an examination and preliminary consultation at the Cork clinic on the scheduled day of your treatment," it wrote to booked patients. "Administration of stem cell therapy will take place in international waters aboard the ferry. The cost of the return ferry and one night's accommodation will be covered by ACT."

Investigation

It goes on to say that the ferry "is fully handicap accessible and has an array of entertainment on board". It also offers the alternative of treatment in the Rotterdam clinic where most patients from the UK have to date gone for their injections.

The doctor who runs the Cork clinic, John Dunphy, is being investigated by the Irish Medical Council - the doctors' disciplinary body which is the equivalent of the General Medical Council in the UK. Speaking to the Guardian, he said this was routine. "When there is any controversy like this, you usually will be called before them," he said. He denied that he would be treating patients on the ferry, but added: "You will have to speak to ACT. I'm merely facilitating ACT. We are looking for any legal way to treat them." ACT declined to answer the Guardian's questions.

Dr Dunphy said he became involved because his sister has multiple sclerosis and wanted stem cell treatment, but was faced with a long waiting list for the procedure at the Rotterdam clinic. Asked what scientific evidence he had that the treatment worked, he was unable to give specifics, but said: "Obviously I wouldn't be using it if I thought there wasn't any."

The Rotterdam clinic, run by Dr Robert Trossel who is based in London and carries out initial consultations in Harley Street, is also under investigation by the Dutch authorities, the Guardian has learned. The Dutch healthcare inspectorate is concerned that the clinic has not submitted any proposals for its experimental work on humans to ethics committees.

"We are doing this because we have had complaints from Dutch neurologists about the way the doctors are treating the patients," said Karen Donk of the inspectorate. The investigation is expected to be concluded by the end of the summer, she said. It would include inquiries into ACT, the supplier of the stem cells.

The clinic has been allowed to stay open during the investigation because there have been no reports of anybody suffering harm, she said.

In the UK, the Department of Health says that although the government is putting £100m into stem cell research, the science is in its infancy. "We would urge caution against seeking treatment or procedures that have not been subjected to rigorous clinical trials and assessment of safety and potential efficacy. Patients with multiple sclerosis are advised to speak to their consultant about their best treatment options," it said in a statement.

US indictment

The two founders of Biomark International, the US company which used to supply clinics with stem cells and which shared members of its advisory board and patient case histories with ACT, are now facing a 51-count indictment from a federal grand jury in Atlanta.

Stephen van Rooyen, 44, and Laura Brown, 35, are accused of distributing untested stem cell treatment drugs "without any basis in science". US state attorney David Nahmias said in statement that Mr Van Rooyen and Ms Brown "provided false and misleading information" about the effectiveness of stem cell treatment.

"This type of fraud victimises people in the most vulnerable situation," said Mr Nahmias. "The allegations in this indictment are serious and will be prosecuted vigorously."

The US department of justice said it would take steps to bring the two to trial. Mr Van Rooyen has returned to his native Cape Town, while Ms Brown is thought to be in England.